How to analyze In 2 minutes a: • Balance sheet • Income Statement • Cash Flow Statement 1️⃣ Balance sheet A balance consists of the following elements: • Current Assets • LT Assets • Current Liabilities • LT Liabilities • Shareholders Equity It shows you what the company owns and owes. This statement is based on a simple formula: Assets = Liabilities + Equity 2️⃣ Income Statement An income statement shows you the income and expenses of a company. Revenue - COGS = Gross Profit - Operating Expenses = Operating Income - Non-Operating Income/Expenses = Pre-Tax Income - Taxes = Net Income 3️⃣ Cash Flow Statement The Cash Flow Statement consists of 3 elements: • Cash Flow from Operating Activities • Cash Flow from Investing Activities • Cash Flow from Financing Activities It shows you the cash that enters and leaves a company. Cash Flow from Operating Activities Net Income + Non-Cash Changes +/- Changes in Working Capital = Cash Flow from Operations Cash Flow from Investing Activities - Capital Expenditures - Acquisitions + Proceeds from the sale of investments = Cash Flow from Investments Cash Flow from Financing Activities +/- Borrow/Repay Debt +/- Issue/Repurchase of stocks - Pay Dividends = Cash Flow from Financing